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Earnings and Incomes of Canadians Over the Past Quarter Century, 2006 Census: Earnings
Little change in earnings during the past quarter century
Median earnings of Canadians employed on a full-time basis for a full year changed little during the past quarter century, edging up from $41,348 in 1980 to $41,401 in 2005 (in 2005 constant dollars).
This relatively small change in median earnings occurred during a period that witnessed strong economic growth as well as substantial increases in the educational attainment and experience of the workforce.1
In 1980, 14.9% of full-time full-year earners aged 25 to 64 had a university degree; by 2005, this proportion had increased to 25.4%. Meanwhile, the average age of full-time full-year earners increased from 38.3 years to 42.4 years.
Earnings of full-time full-year earners rose for those at the top of the earnings distribution, stagnated for those in the middle and declined for those at the bottom.
For the purpose of this analysis, full-time full-year earners were divided into five groups, based on their employment income levels, each group representing one-fifth, or 20%, of the total number of workers.
Between 1980 and 2005, median earnings among the top 20% of full-time full-year earners increased by 16.4%. In contrast, median earnings among those in the bottom one-fifth of the distribution fell 20.6%. Median earnings among those in the middle 20% stagnated, increasing by only 0.1%.2
The 0.1% increase occurred as median earnings fell slightly between 1980 and 2000 and then, subsequently increased. Between 2000 and 2005, median earnings of Canadians employed on a full-time basis for a full year grew a moderate 2.4%, rising from $40,443 in 2000 to $41,401 in 2005.
As was the case during the 1980s and the 1990s, earnings grew faster between 2000 and 2005 among workers in the upper segments of the earnings distribution than among those at the bottom. Median earnings grew 6.2% among the top 20% of full-time full-year earners but fell 3.1% among their counterparts in the bottom 20%.
Table 1
Median earnings, in 2005 constant dollars, of full-time full-year earners by quintile, Canada, 1980 to 2005
- Real gross domestic product (GDP) per capita increased by roughly 50% between 1980 and 2005. GDP in chained 2002 dollars amounted to $1,247.8 billion in 2005, compared to $625.4 billion in 1980 (Cansim Table 380-0017). Population estimates for July 1, 1980 and July 1, 2005 amounted to 24,516,071 and 32,312,077, respectively (Cansim Table 051-0001). As a result, GDP per capita grew from $25,510 in 1980 to $38,617 in 2005.
- Differences in earnings growth were somewhat less pronounced but still substantial among full-time full-year employees, i.e., full-time full-year earners with no self-employment income. Between 1980 and 2005, median earnings among the top 20% of full-time full-year employees grew by 17.9%. In contrast, median earnings among those in the bottom one-fifth of the distribution fell 13.3%. Median earnings among those in the middle 20% increased by 2.8%.
